Beyond Westminster : Defining an Australian approach to the roles and values of the public service in the 21st Century

Last updated: 12 Jul 2012

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A S Podger
Address to IPAA Seminar

Introduction

Some of you will be aware that I appeared recently before the Senate Inquiry into a Certain Maritime Incident to discuss, with a number of academics and a retired Admiral, whether any lessons might be learned. My comments focused on good public administration, including the relationship between public servants and Ministers and their advisers. I could not, of course, comment on the incident itself. My comments drew in particular on the APS Values in the Public Service Act 1999. Today, I intend to expand on those comments.

I also note that next Sunday will be the one hundreth anniversary of the appointment of the first Public Service Commissioner, Duncan McLachlan. The Service is a very different organisation to the one of McLachlan's day. Yet so many of the principles he espoused continue to define the Service - the merit principle, apolitical professionalism, accountability and responsiveness to the elected Government.

Are they now under threat, or can we be confident they will endure for another century?

Public Service Act 1999 revisited

The last quarter of the last century witnessed some major changes in public administration in Australia. To a considerable extent the changes were driven by external pressures : a more demanding public not willing to accept without question the wisdom of a professional public service, and able to make more demands in the information age; and a more competitive world from which public sector performance could no longer be immune.

In the 1970's the Royal Commission on Australian Government Administration (RCAGA) was particularly concerned by the inadequate responsiveness of the Service to the elected Government. Improving responsiveness was central to the changes made in the 1980's and 1990's, particularly the Dawkins reforms. I remember well the current Prime Minister, Mr Howard, applauding in 1996 the increase in responsiveness he saw in the Service since his previous time as a Minister in the Fraser Government.

The financial management reforms, also in part presaged by RCAGA's push for more rational management, came against a background of international economic pressures. The emphasis was on "managing for results" and involved considerable devolution of authority to agencies to allow more flexibility. The shift also involved increased use of market-type mechanisms and a reduced role for centrally-determined process rules. The financial management reforms were paralleled by similar changes in personnel management, with progressively increased devolution of authority to agencies. The reforms have been continued and extended by the Howard Government with such initiatives as the outcomes/outputs budget structure, new financial legislation and the Workplace Relations Act.

As these shifts were taking place, there was also increasing interest in articulating the values of the Service and codifying standards of official conduct within a more devolved and flexible system. Again, some initial work was done through RCAGA and the Institute of Public Administration of Australia (IPAA), with more detailed work by the then Management Advisory Board and its Management Improvement Advisory Committee (MAB/MIAC).

The challenge was to identify some enduring principles within which the Service could continue to operate as an institution of government but with increased capacity to respond to the needs of the elected Government and to adapt to other changes and developments affecting policy and program management.

In many respects, the Public Service Act 1999 represents the culmination of the changes that had already occurred over the previous 20 years. Most powers under the old Act had already been devolved, but the new Act confirmed explicitly that Agency Heads are the employing authorities. It also established the APS Values, with minor modifications from earlier work, and the APS Code of Conduct, again drawing on existing regulations setting out the "duties of officers".

The Act nonetheless is groundbreaking, and many other jurisdictions in Australia and overseas are closely watching what we have done. The key issue is whether the risks associated with shifting away from prescriptive rules of process to legislated principles are manageable, to the satisfaction of the Parliament and the public as well as the Government.

It might be worthwhile at this point to remind you of the provisions in the Act:

the Values are in the legislation - they represent the law - and they are not just aspirational statements of intent;

each Value is supported by Directions from the Public Service Commissioner;

the Code of Conduct is also in the legislation, and sanctions are available for breaches

the Code includes the requirement that APS employees uphold all the Values;

Agency Heads are required to uphold and promote the Values and are bound by the Code of Conduct;

the Public Service Commissioner's first two functions in the Act are to evaluate the extent to which Agencies incorporate and uphold the Values, and the adequacy of the systems and procedures in Agencies for ensuring compliance with the Code of Conduct.

It is probably fair to say that over the last two years the focus of effort has been to bed down the new arrangements required by the Act, with the PSMPC concentrating on finalising the Regulations and providing necessary support and guidance to Agencies, and with Agencies reviewing their governance arrangements to meet their responsibilities, particularly with regard to the Values and Code of Conduct. The State of the Service Reports are increasingly candid about emerging issues and priorities, and we are now considering a more pro-active stance, though still working in close collaboration with Agencies to promote shared learning of better practice.

For last year's State of the Service Report, the PSMPC asked agencies to conduct surveys to test staff understanding of the Values and Code of Conduct. These revealed staff understand most of the Values, but there were some worrying levels of unease about the application of the merit principle and fairness in the treatment of staff. My suspicion - backed by considerable anecdotal data from our networks, hotline and review casework - is that many employees, including in middle management, are not yet familiar with the fact that the application of the Values and Code of Conduct is now through Agency systems and procedures including in particular Chief Executive Instructions, performance management arrangements, corporate planning and management, Certified Agreements and so on. It is not just a matter of training and development or charts on the wall; it is about the serious application of the law. My suspicion also is that staff concerns about application of the Values focus on those that affect them directly and not enough on those that are more central to our responsibilities towards the Government, the Parliament and the public we serve.

I am keen for the PSMPC to work with Agencies to identify and promote better practice, to ensure poor systems and processes are fixed, and to build widespread understanding of the Values and Code of Conduct across the Service.

The nature of the APS Values and Code of Conduct

Let me turn now to the Values themselves, and the Code. While the Act does not group the Values or elements of the Code, or prioritise them, it might assist if I group them in terms of the way they define or shape:

the APS as a key institution in our democratic system;

the relationship between the APS and the Government;

the relationships between the APS and the public;

relationships in the workplace; and

personal behaviour and ethics in the APS.

Four Values represent the classical principles of Westminster public administration which you will see in any text: an apolitical impartial, professional Service; the merit principle; responsiveness to the elected Government; being openly accountable within the framework of Ministerial responsibility.

They need to be read together, because too much weight on one may conflict with another:

note we are not independent, but we are apolitical and impartial;

our responsiveness to the government actually requires us to be frank, honest, accurate, comprehensive and timely in our advice and to implement the government's policies and programs.

In our relationship to the Government may I also highlight the fourth element of the Code of Conduct:

that we comply with all appropriate Australian laws.

(This is no minor caveat to our responsibility to be responsive to Government. Most public servants have legal obligations in terms of the legislation administered by their agency, as well as obligations under financial legislation, various administrative laws and so on. In many respects, this defines us as public servants - our appreciation of due process under the law.

Other provisions that define our relationship with the Government include the obligation to maintain appropriate confidentiality with any Minister or Minister's member of staff - critical to the trust that is an essential ingredient to being responsive - and the requirement to use Commonwealth resources in a proper manner.

In our relationship with the public I would draw attention to the Value of achieving results and managing performance, as well as the need to be fair, impartial and courteous.

In our workplace relations, the central requirement is the merit principle, but I would also draw attention again to achieving results and managing performance, and to equity in employment and freedom from discrimination. Leadership also gets specific mention.

In terms of personal behaviours, we are obliged to have the "highest ethical standards". This is a natural consequence of the authority the public, through the Parliament, has vested in us: that authority must be exercised in the most ethical way. In addition, if we can raise our standards, we isolate those at the margins of legality, and make it easier to act against those involved in fraud and corruption. This does not mean zealotry, because we must abide by all the Values including achieving results and being responsive, but we do need to exercise care and have clear procedures for identifying and addressing ethical dilemmas. Many a public investigation has its origins in the failure to identify an ethical dilemma at the time.

Current challenges - politicisation?

The question of politicisation is not new. Two of the first Secretaries to be appointed in 1901, Robert Garran and Attlee Hunt, were considered by some to have been too close to Prime Minister Barton. John Burton's involvement with the Labor Party was a controversial issue in the 1950's; and Peter Wilenski was also seen to have particular sympathy with one side of politics.

It is also not a one-sided argument. As I mentioned at the start, a key driver of the changes we have seen in the last 25 years, championed by both sides of politics, has been perceptions of excessive independence of the Service and a lack of responsiveness to the elected Government. The facts are that the Values include both responsiveness and apolitical professionalism, and that taking either to an extreme would cause trouble.

There is nonetheless a legitimate debate about the balance between those Values; and there is also a legitimate debate about whether the benefits of improved Agency flexibility and performance resulting from the shift away from central prescriptive rules to general principles, has been commensurate with the inevitable increase in risks to be managed, including risks of politicisation.

It is also true that other initiatives, also aimed at improving responsiveness, and also generally (though not always) supported by both sides of politics, have added to the risk : secretary contracts, increased numbers of ministerial advisers and performance pay for secretaries.

Behind much of this concern for increased responsiveness, which is now perceived by some as politicising the Service, is the serious and difficult challenge of the communications revolution and increased scrutiny by the media. The pressure on ministers to respond to anything and everything immediately has increased dramatically over the last 25 years or so. The capability of the media has increased enormously, not only in terms of the technology employed but also in terms of the numbers and education of media people and their capacity to draw on external expertise. Perhaps fuelled by the communications revolution, the pace and scope of economic, social and technological change has also quickened and widened significantly. It is only natural that ministers require additional resources to help manage all this pressure, and that the resources required are both political and professional. The interface between the politicians and their political advisers, and the Public Service, is accordingly more complex and more fluid.

If there were to be any revisiting of recent initiatives - the streamlined Public Service Act, secretary contracts, secretary performance pay, ministerial staffing arrangements - it would be essential that the facts of modern communications and modern media arrangements be acknowledged. We could not return to the Public Service of the 1950's and 1960's even if we wanted to, and a simple reversal of recent initiatives could be expected only to shift the pressures for ever higher levels of responsiveness elsewhere.

That said, I believe there are areas where further action or review would help:

firstly, in reaffirming the APS Values and in ensuring they are genuinely incorporated in Agency governance arrangements

secondly, in clarifying the proper relationship between the Service and ministerial advisers

there is no doubt a relationship of trust is essential, where the different responsibilities of the two groups are acknowledged, along with the common commitment to serve the minister;

this is best formed when the working arrangements between advisers and APS employees are articulated clearly by agreement between the Minister and Agency Head;

advisers need to appreciate the legal responsibilities of APS employees to the APS Values and Code of Conduct;

they also need to appreciate the formal lines of authority from the Minister to the Secretary, and from the Secretary to Agency staff;

public servants similarly need to understand that close and ongoing communication with advisers is essential, but that advisers do not have the power to direct;

all public servants need to understand that confidentiality is critical to a relationship of trust between the Agency and its Minister;

as I suggested recently to the Senate Inquiry into a Certain Maritime Incident, I believe the Values along with a Code of Conduct should be articulated for ministerial advisers in a similar way to the arrangements now in place not only for the APS but also for the Parliamentary Service (interestingly, the UK has a Code of Conduct for Special Advisers, though it is the subject of considerable debate at the moment);

thirdly, in recognising there are important limits to streamlining processes in order to achieve results

these include our obligations to keep proper records;

fourthly, I would encourage agencies to engage with their staff emphasising our obligation to safeguard and support the democratic process, both by our responsiveness to the elected government and by our apolitical professionalism. There is a role here for the PSMPC to help agencies to promote the Values, and possibly also to help Members of Parliament and their staff to appreciate the roles and responsibilities of the Service.

About two years ago, Allan Behm, Lynne Bennington and James Cummane published an interesting paper on "A Value-creating model for effective policy services". It drew heavily on interviews with ministers, secretaries and advisers both to demonstrate differences in perspectives on good policy advising, and to develop what was described as a model to create more value in policy service. The model has been referred to positively as demonstrating what quality policy advice looks like and how it is evaluated from ministers' perspectives. Yet I do have an unease about a particular element of the model. The final "value creating factor", differentiating quality advice from competent advice, is the "willingness to market Government policies".

That is going too far. Apolitical public servants do not comment publicly on policy in a partisan way - neither selling nor criticising. They certainly must explain, and they must provide professional support in implementation. They also manage major communication strategies and engage with stakeholders and the public : that is part of their professional duties.

Most of the other criteria suggested in the Behm-Bennington-Cummane paper for quality policy service to ministers are entirely consistent with the Values and represent good practice - eg political awareness, consultation across entire organisation and whole-of-government, proactive, creating and innovative, and vision.

My point in mentioning this is that the pressure for responsiveness is for the most part entirely proper and appropriate, and we should be proud of the improvements that have taken place in the performance of the Service in support of the elected government and be keen to maintain and continually improve the quality of our support to ministers. But there is a line to be drawn and even commentators with long public service experience do not always consistently get it right.

Of course, there are some who argue that politicisation is inevitable, and should be embraced by allowing a significant slice of senior public servants to be appointed on a political basis. I have been following with some interest the current UK debate which has close parallels to the debate here particularly with regard to the role and responsibilities of ministerial advisers. One comment by Sir Robert Armstrong, former head of the Civil Service, seems to me particularly relevant. In referring to the Northcote-Trevelyan reforms of the nineteenth century, he notes that not only was the permanent civil service not seen as inimical to change or an impediment to reform but, on the contrary, it was seen as enabling change, and able to adapt to change.

While there are various legitimate mechanisms to help the elected Government in its increasingly challenging task, I remain firmly of the view that an apolitical and professional Service is critical, and will be so for the second century of Federation, ensuring the capacity of the system to adapt to and enable change.

Current challenges - efficiency, effectiveness and quality

There is considerable evidence now of increased productivity in the public sector over the last decade and more. Productivity Commission reports have identified improvements in the efficiency of public utilities and a range of human services. There is also evidence of improved effectiveness, such as in employment services through Job Network, and in health outcomes through clinical and pharmaceutical programs as well as preventive programs. In some of the most complex fields such as social security and child support, the Public Service has clearly lifted its performance in providing quality service to its clients while meeting the strict requirements of legislation. And in regulatory fields such as Therapeutic Goods Administration, the Service is far more responsive than in the past to the concerns of stakeholders with substantial improvements in timeliness and costs of transactions.

While it is not possible to state unequivocally the factors behind these improvements, and while there have been many mistakes and cases of poor performance, I believe it is fair to suggest that the management reform agenda of the last two decades has had considerable positive impact - on the budget, and on the clients we serve. That reform agenda, focusing on managing for results and involving considerable devolution, has facilitated improved business and corporate planning, better performance management, increased use of competition, and better management of people as well as finances.

The emphasis in the Management Advisory Committee's report late last year on performance management, on an integrated approach linking corporate and business planning, governance through to individual performance appraisal, has been increasingly picked up across agencies over the last 5 or more years, and the alignment is yielding results. Certified Agreements and Australian Workplace Agreements are now widely employed to support this alignment, and to promote shared commitment to the success of agencies in meeting their business aims.

There remain many challenges, however, not the least being the dangers of stovepipes : the risk that the very devolution that has helped to improve performance might exacerbate the problems of coordination, just when community expectation of seamless services and whole-of-government coordination is soaring.

There are several aspects of the challenge of coordination : policy development, program administration and service delivery for common customers and stakeholders; and coordination across jurisdictions. The issue is hardly new, and some of you may recall the Coombs Royal Commission trial of a "One Stop Shop".

My strong suspicion is that the solution will not be so much a structural one, but one based on systems and relationships. Modern systems have the potential to establish virtual organisations, and to support ad hoc project teams that cross organisational boundaries. Such linkages however are dependent on excellent relationships, and the capacity to appreciate diversity and different perspectives in depth. The Management Advisory Committee is currently engaged in a project on e-government, and whole-of-government requirements that might set some of the governance framework for future connectivity. There are also some new trials underway involving cooperation amongst a number of service delivery agencies at Commonwealth and State level, focusing in particular on Indigenous communities. I expect the Management Advisory Committee will be keen to draw lessons from these for good practice in the future.

Another closely related challenge is the management of external boundaries, with customers and stakeholders. Increasingly, agencies not only manage communication strategies to inform the public or particular groups about programs and policy initiatives, but engage actively with stakeholders to help in the development of policy and the administration of programs. This is part of the quality agenda. There is a growing science surrounding these strategies and approaches, and increasing appreciation that governance arrangements need to be clarified. Expectations of responsiveness direct to the public and stakeholders must be handled consistently with our formal accountabilities to Ministers, the Government and the Parliament.

A final challenge I wish to mention today concerns "hollow government". This is another part of the boundaries issue. It may be debated as to how far we will go in outsourcing service delivery to improve efficiency, but the shift to use third parties to provide support activities as well as deliver services has been very substantial over the last 25 years, and I doubt the pendulum has gone full distance yet. Part of this shift relates to the "managing for results" theme, which moved the emphasis from prescriptive rules of process to clarification of program objectives and accountability for performance against them. In many cases, accountability in terms of outputs and outcomes has increased through these purchaser/provider splits. And, as mentioned, there is reasonably convincing evidence of performance gains in most cases. Yet there are challenges involved, and risks to be managed. The Auditor-General has raised questions about transparency, and accountability for aspects of process as well as results. We in the Commission need to work with agencies to articulate good practice with regard to the application of the APS Values through contracted services. I suspect some Values can be picked up directly in contractual requirements, but others may depend on more subtle relationships and shared ethical standards that are not so easily established. Agencies such as Defence have considerable experience in this field; many others do not, and need guidance to ensure good practice is reflected in their Chief Executive Instructions and in training for contract management. Another impact of outsourcing that needs to be managed is the risk of loss of expertise needed for strategic management and for informed purchasing. Career planning and management needs careful revisiting.

Conclusion

There are many other challenges facing the Service, but I have highlighted today those that have particular relevance to the APS Values.

None of these challenges in my view require any fundamental re-examination of the Values, nor of the shift to a values or principles-based legislative framework for the APS. Indeed, the increasing emphasis on permeability and on managing uncertainty and a faster pace of change, tends to confirm the wisdom of moving away from centralised prescriptive rules. And the Values set out in the Act continue to define the APS as a key institution in our democratic system of government.

Yet there are risks, if the Values are treated as rhetoric and are not taken seriously. Application of the Values does need a sharper edge : they need to be reflected in agency governance arrangements including Chief Executive Instructions, as well in systematic learning and development activities. As mentioned, there is also work to do to complement the Values and Code of Conduct for example by clarifying the framework for Ministerial advisers, and by promoting good practice in "joined-up government".

There are risks if we do not get this right. One is that Governments unsatisfied with our capacity to serve them might look for a totally new model that might not serve the country at all well; a possibly more likely risk is that the pendulum will swing dramatically back towards central controls with which the Parliament might feel more comfortable notwithstanding the costs.

The Values are enduring, but they also need to be applied in the real world we live in. Some can be in tension, such as those relating to apolitical professionalism and responsiveness. We are more likely to get our judgements right, if there is more informed dialogue about the APS Values and Code of Conduct, and some articulation of the corresponding values and code of conduct of other players in the democratic process.

The Public Service Act 1999 is now well established. It is time we ensured all agencies have in fact reflected the Values and Code of Conduct in their governance arrangements, all APS employees are familiar with their responsibilities, and we look to how we might fully exploit the framework now in place to improve the performance of the APS in serving the Australian public.

About the Commission

The Australian Public Service Commission (APSC) is a central agency within the Prime Minister and Cabinet portfolio. The Commission supports two statutory office holders: the Australian Public Service Commissioner—who is also agency head—and the Merit Protection Commissioner. Their functions are set out in sections 41(1) and 50(1), respectively, of the Public Service Act 1999.